Collections

Q: What is collections?

A: Collections generally involves the collection of past-due amounts or receivables owed to a business by an individual or by another business. It can be consumer collections which involves collection of debts owed by individuals that were incurred primarily for a personal, family or household purpose or commercial collections which involves debts owed by businesses or individuals for business related debts.

Q: What type of collections work does your firm handle?

A: We routinely handle both consumer and commercial collections.
 
Q: What is the difference between collections done by a collection agency and by an attorney?

A: A collection agency sends a series of demand letters to a debtor and usually combines its mail campaign with a series of phone calls. Many collection agencies operate on a high volume basis and handle all claims that are referred to them using a "cookie cutter" or "assembly line" approach where each claim is handled the same way (regardless of the circumstances of the debt or debtor involved). An attorney uses the law courts and legal process to collect the debt and the legal strategy is tailored to the specifics of the case. 

Q: What are the stages of collections?

A: For each claim that is accepted for collections, generally the first stage in the collection process is to investigate the debtor and its financial situation (assets and liabilities). This is done by accessing a variety of public records and private data sources available to us, including private subscription only data bases to which we subscribe. Based on the results of the initial investigation, a final demand letter may be sent to the debtor. We may combine this with a phone call to the debtor.  In some circumstances this step may be skipped entirely and a law suit will be commenced immediately.

The second stage of the collections process is to file a lawsuit. This is litigation to collect the past due amount. The goal of collections litigation is to obtain a judgment or settlement. A collections case is not undertaken in the anticipation of contested litigation. A collections case is one the debtor is not anticipated to raise any substantial defenses, and typically is the type of case where creditor could obtain summary judgment (judgment by motion prior to trial) based on the underlying documents and a supporting affidavit.  
Once a judgment has been obtained the third stage of the collections process is judgment enforcement or post-judgment collection. The collections attorney seeks to enforce the judgment against assets of the judgment debtor and turn it into cash using a variety of judgment enforcement tools permitted by law.

Q: What tools are available to a collections attorney to seek to enforce a judgment?

A: There are a variety of legal tools that a collections attorney can use to seek to enforce a judgment on behalf of a judgment creditor. In Georgia a collections attorney can serve a garnishment on the judgment debtor’s employer, on banks holding or believed to hold accounts of the judgment debtor, and upon third parties that owe the debtor money (such as the debtor's customers or clients).  The judgment debtor can also be compelled to answer written questions under oath or to participate in a post-judgment deposition (an oral examination under oath) regarding the identity and location of the debtor's assets. The sheriff or marshal can be instructed to seize and sell the debtor's assets, such as equipment, vehicles, and real estate, among others. There are other devices that can be employed depending on the nature of the debtor's assets.

Q: What is the likelihood of recovery on my claim turned over for collections?

A: The answer to this questions depends upon a number of factors including the age and size of the receivable and what it is for, whether the debtor is still employed or engaged in business, whether the debtor has unencumbered assets, whether or not the debtor is a defendant in other litigation, and whether there are prior unsatisfied judgments against the debtor. In addition, the more information you are able to provide regarding the debtor, such as where the debtor banks, or the debtor's primary customers or clients, the better the chances of recovery.